Monday, May 1, 2017

In
early 2011, several reports Indian media alleged Swiss Bankers Association
officials to have said that the largest depositors of illegal foreign money in
Switzerland are Indians. Though these were to be denied immediately later
by Swiss Bankers Association as well as the central bank of Switzerland – there
have been many reported list containing the name of Indians having such black
money deposits.

In
March, the salaried Indian middle class gets a different stress ! – Employers
would be deducting tax at source; many would have assured saving in specified
schemes X amount, trying to have some IT exemption – at the 11th hour would find that they could
not save~ interestingly some would borrow to save !! April is different,
salaried middle class ordinary Indian is busy providing details of proposed
savings and possible deductions towards Housing loan and more !!

Money
problem would mean different to different persons. Often the talk dwells
on ‘black money’, nay not the colour of money. Sometime back …. ‘a YYY
group gave crores of loan, free of interest to that Eye hospital, which one
were seeing at every corner that time. It also gave substantial amount of
Rs 40 cr in cash — that is, black money — ‘all on a single day’, ‘as a single
transaction’ – the cash reportedly found its way to an influential politician
who was an ex Central Minister… Corruption, hoarding of money, black
money and stashing money in foreign banks have been haunting the Nation and
have been the themes of many blockbuster films where the incidence of black
money is very high !

Till a
few decades ago, men lived for their pride – keeping up promises and paying
back debts were virtues and somebody not able to do so would even give up their
lives. Those who were unable to pay back their debts for some reasons
announced their position by filing ‘insolvency petition’ [called yellow
leaf-let] and those who had done so, had no honour in the society and would
often commit suicide. In recent times, we often see that Companies [chit
funds and others] collect public money, don’t repay and cheat the public – the
owners / directors when arrested, merrily wave their hands to the media, as if
they had just achieved some notable thing.

In
Sankar’s ‘Sivaji, the Boss’ the story line was black money…. In
Kandasamy, Vikram would hack the password and transfer millions of the
villain’s account. In Hollywood style, James Bond enters a Swiss bank in Spain
and is frisked before he can meet with the banker. In the "Da Vinci
Code," a triangular-shaped key activates a robotic arm that pulls a safety
deposit box from the wall in a Swiss bank in Paris to ultimately reveal the
secret to Christianity. Never sure whether such things would happen and for
that matter not sure even of imagination, on what a Swiss bank looks
like. Mostly we have a distorted or mostly unrealistic view of what
it really means to have the prestigious Swiss bank account. Our imagined
Swiss bank accounts is for millionaires, criminals or government officials
trying to hide ill-gotten wealth, celebrities protecting their assets
from former spouses.

Ever heard realistic version of a
person holding Swiss bank account ? – here is a Dehradun jeweler who has
been handed imprisonment !

The
court of the Dehradun Chief judicial Magistrate (CJM) recently sentenced
the owner of a famous jewellery showroom at Dehradun to two years'
rigorous imprisonment for “hiding“ his Swiss bank account from the income tax
(I-T) department. The court also slapped a fine of Rs.8 lakh on Raju Verma, who
owns Punjab Jewellers on Rajpur Road. A prosecution lawyer said the I-T
department had found that Verma had `92 lakh in his Swiss bank account in 2006,
“which he had not disclosed to evade tax“. The jeweller has been convicted
under Section 276 C (1) (wilful attempts to evade any tax) and Section 277
(false statement in verification) of the Income Tax Act 1961. The court,
however, freed Verma on bail for a month to appeal in a higher court.

Incidentally
, the I-T department had received a written complaint in 2012 which claimed
that Verma had a personal bank account in HSBC's Geneva branch in Switzerland,
which he had not disclosed to the government. “On the basis of the complaint,
I-T department sleuths raided his house on Dehradun's Curzon Road on March 14,
2012 and recovered important documents regarding his Swiss bank account. He
neither took the Reserve Bank of India's (RBI) permission to open the account
and nor did he disclose the money deposited in it,“ prosecution lawyer SM Jain
said. After gathering evidence against the jeweller, the income tax department
filed a complaint with the economic offences wing of the CJM court in Dehradun
in 2015. During the trial, the prosecution examined six I-T department
officials, including its commissioner and inspectors, to prove the offence.
An official told TOI that ED imposed a fine of `5 lakh on Verma for
violating Fema rules, which has already been paid by him.

For all
that hype surrounding Swiss accounts, the secretive era could be at an
end. The neutral country has long been famed for its anonymous accounts
which can be used to facilitate money laundering and tax evasion as well as
being used for entirely legitimate purposes. It has now bowed to
increasing pressure to come into line with international transparency standards
by introducing rules that ensure bank accounts details will be shared with tax
authorities of other nations.

More
than one hundred other states have already signed up to the international
agreement. Switzerland will begin collecting the information this year and
share it in 2018 with other signatories to the Multilateral Convention on
Mutual Administrative Assistance in Tax Matters. Prior to 2017, Switzerland
only provided bank account information upon request to countries with which it
had signed a bilateral agreement to prevent double taxation. Even then, there
was no guarantee of full cooperation. Data will now be automatically shared
once a year among all countries who have signed up to the agreement.

For
most of us, the news is interesting but has little or no relevance !